The hotel proposed for Denver Union Station would generate over $22 million more in revenue for RTD than the competing plan with a proposed market, but many say it would not create the public space envisioned for the historic building.

Union Station Alliance wants to transform the station into a 130-room boutique hotel, saying it would be Denver's "living room." The team estimates it will pay the Regional Transportation District about $65 million over the 60-year term of the lease. It also will generate $130 million in taxes and create hundreds of jobs.

Meanwhile, Union Station Neighborhood Co. says its plan will generate $42.5 million for RTD over the same period.

"Our proposal generates enough revenue to RTD to cover the operating costs to the building and gives them a sinking fund — essentially a long-term capital repair and maintenance fund," said Frank Cannon, development director for the project.

A major difference in the proposals is the financing structure.

Union Station Alliance, led by Sage Hospitality's Walter Isenberg and longtime Lower Downtown developer Dana Crawford, wants to spend $48 million transforming the historic building into a hotel with the train room serving as the lobby. The project would have local and national tenants, with everything from quick-service restaurants to gourmet grab-and-go and a 24-hour diner serving travelers passing through the station.

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"We're working with local chefs to create a collection of food and beverage spaces," said Joe Vostrejs, chief operating officer of Larimer Associates, which would handle restaurant and retail for the project. "When you come to Union Station, you'll know you're in Colorado."

Financing would include $11.5 million in equity, $7.5 million from the sale of tax credits, 50 percent debt and $17 million from RTD.

"The other team's investment is nominal and underutilizes the asset," Isenberg said. "There is nothing more public than a hotel. The current office configuration lays out nicely for a hotel."

In addition to the market, which would be operated by a single local company, Union Station Neighborhood Co.'s proposal features the Terminal Bar at the current Amtrak ticket window, and cafes and office space on the second and third floors, including an incubator for "creative class" businesses.

The team has identified $22 million in available funding sources that would enable work on the historic station to start immediately. Those include the $17 million from RTD and a $2 million equity investment from the developer. It also is lining up $3 million in historic tax credits.

"Risk that asset"

Because the Union Station Neighborhood Co. plan is not using debt to finance the plan, there's no risk that the building, now owned by public agencies, would go back to the lender if the developer was unable to pay off the debt, backers of that plan say.

In 2001, RTD partnered with Denver, the state and Denver Regional Council of Governments, spending $50 million to get the Union Station building and surrounding 19.5 acres into public ownership.

"To risk that community asset by putting debt on it doesn't make sense," said Mark Falcone, whose company, Continuum Partners, makes up half the Union Station Neighborhood Co. team.

RTD is expected to announce the selected proposal at a meeting Nov. 22.

The other issue, Falcone said, is that a hotel lobby would not be able to handle the volume of passengers expected to move through the station, which will serve as a multi modal transit hub. RTD anticipates 100,000 passengers a day will move through Union Station. By comparison, Denver International Airport handles about 140,000 travelers a day.

"What better way to preserve the building than using it for what it was originally intended to be," Falcone said.

While RTD would see a greater return on its investment with the hotel, many in the community believe the market concept would be more accessible to the public.

"What they've done (in their proposal) is taken over the main public space, which is the train hall, and called it a living room, but it's a hotel lobby flanked by a reception desk at one end and a bar at the other end," said Jeffrey Sheppard of Roth Sheppard Architects, whose office is two blocks from the station. "What they've done is a disgrace to the building."

Several years ago, RTD went through a process to determine what the goals for the building should be. Topping the list is ensuring the building maintains its original purpose as a transportation hub with the central train room as a focal point. It also must be a vibrant place where people want to hang out.

"This building is the gateway and iconic representation of the (FasTracks) project, and it needs to be active and it needs to be fun," said Bill Mosher, senior managing director and principal of Trammell Crow, who is representing the Denver Union Station Project Authority. "Having the public place being primarily the train hall and having active uses in the wing buildings on the main floor is critical. I think both proposals do that in different ways."

The other major issue is financial. It's critical the building be redeveloped in such a way that it is viable economically and justifies RTD's investment in the project.

"They have to make it worth RTD's while as the owner of the building," Mosher said. "RTD will be looking for some economic return on their investment in the building."

People in the neighborhood have mixed feelings about whether the redevelopment of the historic building should include a market serving Colorado products or a boutique hotel, which would be affiliated with Denver's Oxford Hotel.

Favorable survey

An informal survey of several people in the neighborhood last week found that most think a market would liven up the building and would give commuters a place to stop to buy items to take home.

"It seems that since this is a confluence of various forms of transit, it would make more sense to commuters to have convenience items at a market," said Chuck Madison, who owns a condo in the nearby Icehouse. "There's plenty of land for a hotel. You can build a hotel that's purpose-built, but there's no place to shop down here other than 7-Eleven."

But Josie Arreola, manager of Paradise Cleaners on 17th Street, said converting the building into a hotel would ensure that its historic character is preserved.

"The hotel would be better because the building would be better taken care of," Arreola said. "It takes care of the history. I'd rather them preserve Denver the way it is."

But why not incorporate elements of both plans into the building, wondered Ami Cusack, morning manager at the Common Grounds coffee shop.

"There are already so many empty businesses down here — we don't need more office space," she said. "Why not do a hotel with a marketplace on the first floor?"

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